Shieldpay launches essential guide to escrow and paying agents for legal sector

Shieldpay, the payments partner for the legal sector, has released The Escrow & Paying Agent Handbook to equip legal professionals with a thorough understanding of escrow and paying agent services.

With growing concerns over regulatory change and administration, security and compliance risks within the legal sector, the guide outlines the benefits of using specialist payment providers to mitigate the risks associated with transactional payments, such as in mergers and acquisitions, real estate transactions, litigation settlements, and intellectual property rights. Throughout the eBook, there is also a key focus on the advantages of digital solutions and explains how technology-led payment solutions benefit legal service providers by providing a more efficient and seamless transaction process for clients.

The Solicitors Regulatory Authority (SRA) recently launched their consumer protection review in response to firms' failure to comply with their AML obligations, Accounts Rules infractions, and the Axiom Ince scandal which saw £66 million being misappropriated from its client account. With the handling of client money under close scrutiny, law firms need, more than ever, to demonstrate that they have secure and robust processes in place. Firms must ensure that client funds go to and from the correct individuals or entities and look to new ways of working and specialist tooling to reduce any risk of fraud, money laundering, and terrorist financing.

Although there is a focus on escrow and paying agent services, the guide explains that not every deal warrants their use; every transaction requires a slightly different approach depending on its unique risks and requirements. There is a chapter outlining different options for completing deal payments and the merits and limitations of each. However, for transactions of a greater risk profile and more complexity, a specialist payment provider can ease the operational and administrative burdens, improve security and compliance, and reduce the risk of delayed or erroneous payments.

Ed Boal, Head of Legal at Shieldpay, and former law firm COLP, said: "Paying agents and escrow providers work hand in hand with legal professionals to ensure the secure and timely execution of complex payment transactions. Given the evolving threat landscape, which includes cyber risks and increased scrutiny on the handling of client money, it is more essential than ever for law firms to look more closely at alternative options for the handling of client monies and how they deal with payments in the course of projects and transactions."

"Engaging with technology-led third-party providers to facilitate a safe and seamless payments process for high-value transactions is no longer a 'nice to have', it's crucial for continued success. Misallocated funds and regulatory breaches damage reputations and erode trust in legal advisers. Our guide helps legal providers fully understand the advantages of using different payment services."

Handling client money in-house is clearly a widespread concern in the legal sector, with almost three-quarters (73%) of legal professionals stating they are worried about the risks and time costs associated with holding client funds, according to Shieldpay's Time is Money report.

To close significant corporate and commercial legal transactions, legal teams often have the responsibility of managing deal payments. However, this financial aspect is often far from simple and has to be carried out under significant time and budgetary constraints. Shieldpay's guide explains the payments process in clear stages, including due diligence, document collection, and bank account verification checks.

For a copy of The Escrow & Paying Agent Handbook, visit www.shieldpay.com